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Woodpile Report

By Ted Dunlap, on June 11th, 2017

The current Woodpile Report is a good’un … as usual… maybe moreso. Regardless, I highly recommend going there and reading all of it. Skimming is allowed, but I suspect you will read. Prepare to bookmark and come back to finish.

I give you one compelling bit below. Click the title to go see the entirety.

As I mentioned last week, there are a number of economists predicting a monster run up in the stock exchanges—near 30,000 on the DJI around the end of the third quarter—then a sputtering stall with a quivering violin note in the background, followed by an unstoppable, cascading crash sweeping all before it in the grandest reset since Pompeii. They present loads-o’-supporting evidence natch, arcane theories along with thundering appeals to authority, some long dead.

Market crash?! Pshaw, sneer the naysayers, it’s different this time, how many times we gotta hear this? Ahah, that’s what they said the last time, it fits the pattern exactly, say the believers. But as I’ve said elsewhere, the future doesn’t yet exist, there’s nothing to measure, so all predictions are equally valid, which is to say, equally not valid. It’s prudent, however, to make your best estimate and prepare accordingly. Be aware, the evidence really is compelling the bottom of the bucket won’t hold.

The economic collapse is already deepening nicely under its chewey-sweet coating of pretend-and-extend, so as catastrophes go the equities market is a secondary dial on the doomsday monitor, worse, it’s suspiciously unreliable as an indicator of what it allegedly measures. But should it redline we’re talking about trillions of notional dollars going notionless, if taken together with its joined-at-the-hip bond market and derivatives. Whatever the probability of a ’29-type crash may be, the severity would be extreme.

So forget the Fibonacci sequence and Fourth Turning and Elliott Wave stuff. The inflection point will be nigh when a steeply rising market—all-time high after all-time high—hits a ceiling and dithers with multiple shoulders. Then it’s “first out is best out”.

Yes, sometimes unreasoning panic is prudence itself. ATMs are the “bank run” of choice today, should they wink out, hie thee from crowds, betimes. What may come next doesn’t bear dwelling upon but here’s a hint, it involves flash goggles and potassium iodide.